Duncan Donald

Wed, Jan 30

Brexit Parliamentary Vote Update – 30.01.2019

Last night’s House of Commons vote was the first to show a majority of unity in the House as Members of Parliament voted in favor of an amendment to the deal to ensure the UK does not walk away with “No Deal”. This was named the Spelman amendment, and also agreed the Brady amendment, which demands that the Irish backstop be removed from the Brexit agreement.

Whilst on the face of it this seems positive that we are now seeing some form of Parliamentary agreement, we have to look at the realities of obtaining these non-binding amendments from the EU.  Whilst these amendments show that the Prime Minister has got the majority of her Government behind her, she does now face the task of going back to the EU to seek fresh terms, with no more slack in the terms from the UK and terms the EU have already rebuffed.  The EU’s Tusk immediately reiterated after the vote that these terms are non-negotiable, backing up what we had heard from Jean Claude Junker earlier in the day.

Significantly, the proposed Cooper amendment did not pass, this was the proposal to give Parliament the power to delay Brexit for 9 months giving time to negotiate and come up with a workable solution.  So, with the vote supporting amendments that will be very difficult to obtain from the EU and no majority backing of an extension of the timeframe to negotiate terms, we are naturally seeing some downside in the Pound, with GBP-USD hitting a low of 1.3060 from 1.3200.

So, whilst PM May will feel more supported by Parliament as she heads back to the negotiating table in Brussels, the task ahead remains an incredibly tough one, so expect some further volatility as the UK and EU work on finding a mutually agreeable solution.